Saturday, November 7, 2009

PART I: BEARISH COUNTS (P2 TOPPED AT 1101.36 AND CURRENTLY IN P3. WE FINISHED MINUTE [i] AT 1029 AND CURRENTLY IN OR FINISHED MINUTE [ii] TODAY AT 1071.48 AND ABOUT TO BEGIN MINUTE [iii] DOWN TO 1000-1020) -

"Basically, I labelled the correction down to 1029 as a second X wave. So I have one final abc move left for a rare triple ZZ. That last abc is it when I refer to wave (a).

The SPX is in a VERY tricky situation. I am watching two potential set ups.

1. The inverted H&S formation could form much smaller left and right shoulders than what one would think on first glance.

2. A so called leading diagonal (LD) could be forming in the wave (a) position. Right now, the fourth wave would be forming. I give this formation quite some credibility. The final fifth wave should be an acceleration to the 1074 - 1076 area. It could happen end of day OR first thing Monday morning. IF such an acceleration (or gap up on Monday morning) happens, GET OUT as fast as you can.The reason is that an LD is followed by a very sharp retracement, likely down to 1050. This retracement could last 2 - 3 days.

I don't expect any drop today. Even after the sharp retracement, if it happens, new highs are certain. So the major market direction is up."

PART I: BEARISH COUNTS (P2 TOPPED AT 1101.36 AND CURRENTLY IN P3. WE FINISHED MINUTE [i] AT 1029 AND CURRENTLY IN OR FINISHED MINUTE [ii] TODAY AT 1071.48 AND ABOUT TO BEGIN MINUTE [iii] DOWN TO 1000-1020) -

"Basically, I labelled the correction down to 1029 as a second X wave. So I have one final abc move left for a rare triple ZZ. That last abc is it when I refer to wave (a).

The SPX is in a VERY tricky situation. I am watching two potential set ups.

1. The inverted H&S formation could form much smaller left and right shoulders than what one would think on first glance.

2. A so called leading diagonal (LD) could be forming in the wave (a) position. Right now, the fourth wave would be forming. I give this formation quite some credibility. The final fifth wave should be an acceleration to the 1074 - 1076 area. It could happen end of day OR first thing Monday morning. IF such an acceleration (or gap up on Monday morning) happens, GET OUT as fast as you can.The reason is that an LD is followed by a very sharp retracement, likely down to 1050. This retracement could last 2 - 3 days.

I don't expect any drop today. Even after the sharp retracement, if it happens, new highs are certain. So the major market direction is up."

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About Me

I have been trading stocks since 2008 and options since 2009. I developed an interest in stock market from my mom, who has been trading in India since 1992. I have a day job and I primarily trade for fun. My interests are technical analysis and trading options. I primarily use support and resistance levels, fibonacci retracement levels, MACD and RSI as my trading tools. To me, Elliot waves are good to explain past market movements but they are not as good in predicting future market direction.